TIDMAVON
RNS Number : 8148M
Avon Rubber PLC
02 May 2018
AVON RUBBER P.L.C.
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS
ED 31 MARCH 2018
6 MONTHS OF STRATEGIC PROGRESS
Paul McDonald, Chief Executive Officer
"We have delivered strong financial results, with underlying
performance more than offsetting currency headwinds, whilst
continuing to build the order book. We have also made further
progress on the longer-term growth opportunities for our expanding
product portfolio.
The performance reflects the benefits of the strategic actions
being implemented to enable the Group to continue to grow
sustainably in our core markets. Building on this platform, and
with the momentum from our expanding product portfolio, the Board
remains confident on delivery of its current year expectations and
is excited by the medium-term prospects for the Group."
31 March 31 March % Increase % Increase
2018 2017 Reported Constant
Currency
(Restated)(2)
------------------------------ --------- --------------- ----------- -----------
Orders received GBP88.3m GBP90.8m (2.7%) 5.0%
Closing order book GBP40.6m GBP34.5m 17.7% 29.6%
Revenue GBP77.7m GBP78.9m (1.5%) 5.9%
Adjusted(1) operating profit GBP11.6m GBP10.9m 6.4% 18.9%
Operating profit GBP9.9m GBP9.6m 3.1% 18.4%
Net cash GBP39.1m GBP12.6m Up GBP14.4m(3)
Adjusted(1) basic earnings
per share(4) 32.8p 28.6p 14.7% 33.7%
Basic earnings per share(4) 27.9p 24.7p 13.0% 33.6%
Interim dividend per share 5.34p 4.11p 30.0% 30.0%
------------------------------ --------- --------------- ----------- -----------
Operational highlights
-- Avon Protection growth driven by strong Law Enforcement performance
-- Positive Military order intake contributing to building the order book for 2019
-- milkrite | InterPuls growth momentum in Farm Services and Precision, Controls & Intelligence
-- Powered Air range NIOSH approval obtained together with first customer orders
-- MCM100 initial customer orders received for delivery in H2 2018
-- UK MOD General Service Respirator 5 year contract signed for deliveries starting in 2019
-- Avon Engineered Fabrications, Inc. ("AEF") non-core divestment for $9.25m
Financial highlights at constant currency
-- Orders received up 5.0% and GBP10.6m ahead of revenue
-- Closing order book of GBP40.6m provides excellent visibility
going into the second half of 2018
-- Revenue up 5.9% at GBP77.7m and adjusted(1) operating profit up 18.9% at GBP11.6m
-- EBITDA margins improved by 20bps to 19.9%
-- Strong EBITDA cash conversion of 123.9% and the divestment of
AEF resulting in net cash of GBP39.1m, up GBP14.4m in the half
year
-- Adjusted(1) earnings per share of 32.8p, grew by 33.7%
-- Interim dividend per share of 5.34p, up 30.0%
Notes:
(1) The Directors believe that adjusted measures provide a more
useful comparison of business trends and performance. Adjusted
results exclude exceptional items, defined benefit pension scheme
costs, the amortisation of acquired intangibles and discontinued
operations. The term adjusted is not defined under IFRS and may not
be comparable with similarly titled measures used by other
companies. A reconciliation of reported numbers to adjusted numbers
is provided in note 4 to the interim financial statements.
(2) 2017 has been restated to reflect the continuing operations
of the business following the sale of AEF on 30 March 2018 and to
correct the charge for share based payments as previously reported
in the 2017 Annual Report. The restatement did not have any impact
on the prior period comparatives for adjusted and reported
operating profit and earnings per share.
(3) Movement since 30 September 2017.
(4) Earnings per share and adjusted earnings per share are
presented on a continuing operations basis.
For further enquiries, please contact:
Avon Rubber p.l.c.
Paul McDonald, Chief Executive Officer 01225 896300
Nick Keveth, Chief Financial Officer
Weber Shandwick Financial
Nick Oborne 020 7067 0700
Tom Jenkins
An analyst meeting will be held at 9.30am this morning at the
offices of Weber Shandwick Financial, 2 Waterhouse Square, 140
Holborn, London, EC1N 2AE. The analyst meeting will be webcast live
on www.avon-rubber.com
Legal Entity Identifier: 213800JM1AN62REBWA71
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation ("MAR") EU no.596/2014. Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain.
Note to editors:
Avon Rubber p.l.c. is an innovative technology group
specialising in respiratory protection systems and milking point
solutions through our two businesses Avon Protection and milkrite |
InterPuls. We design, test and manufacture specialist products and
services to maximise the performance and capabilities of our
customers.
Avon Protection is the recognised global leader in advanced
Chemical, Biological, Radiological and Nuclear (CBRN) respiratory
protection systems for the world's Military, Law Enforcement and
Fire markets.
milkrite | InterPuls is a global leader providing complete
milking point solutions to customers across the world with the aim
of improving every farm it touches.
For further information please visit the Group's website:
www.avon-rubber.com
Interim Management Report
Overview
During the first half of 2018 we have continued to make
excellent progress delivering our strategy to generate shareholder
value through maximising organic sales growth from our current
portfolio, supported by selective product development, and through
value enhancing acquisitions.
In Avon Protection, we have seen significant market share gains
within Law Enforcement as well as higher filter and spare sales
from the increased customer base. Military order intake for
existing platforms for both the DoD and Rest of World customers has
been positive and enables us to build visibility into 2019. In
milkrite | InterPuls, we have seen good growth in the Farm Services
and Precision, Control & Intelligence ("PCI") products, despite
weaker market conditions in North America impacting the performance
of Interface. This reflects both the benefits of our differentiated
Farm Services ownership model as well as the added value our PCI
products bring to customers in terms of driving farm efficiency. As
a result the Group delivered strong constant currency revenue
growth in the first six months of the year and positive order
intake across the business has resulted in a closing order book at
the half year of GBP40.6m (Sept 2017: GBP30.0m).
Our focus on new selective product development has continued
with GBP4.4m of investment in research and development projects
during the first six months of the year. We received NIOSH safety
approval in North America for our Powered Air range and are in full
production readiness for the MCM100 underwater rebreather, with
first deliveries during the second half of the year. We will also
launch our Magnum Self Contained Breathing Apparatus ("SCBA") and
the heavy duty PCI products in North America during the second half
of the year.
The divestment of AEF, the US based manufacturer of hovercraft
skirts and bulk liquid storage tanks, supports our focus on growing
the core business in our chosen market segments. We continue to
explore acquisition opportunities, where we see the potential to
deliver significant strategic and financial value. Our strengthened
balance sheet will enable us to execute on these acquisition
opportunities where our commercial and financial criteria are
met.
Group Results
The Group has delivered a strong financial performance in the
first half of the year with revenue and adjusted operating profit
increasing at constant currency by 5.9% and 18.9% respectively.
Given our US businesses constitute over 70% of the Group, the
strengthening pound during the first half of the year has resulted
in reported revenue decreasing by 1.5% to GBP77.7m and a smaller
increase in reported adjusted operating profit of 6.4% to GBP11.6m
(2017: GBP10.9m) at actual currency.
After a tax charge of GBP1.6m (2017: GBP2.0m), an adjusted
effective rate of 14% (2017: 19%), the Group recorded an adjusted
profit for the period after tax of GBP10.0m (2017: GBP8.7m).
The reduced tax rate of 14% (2017: 19%) has resulted in adjusted
basic earnings per share increasing by 33.7% at constant currency
to 32.8p (2017: 28.6p). Basic earnings per share from continuing
operations were 27.9p (2017: 24.7p).
Operational cash generation has continued to be strong with
EBITDA cash conversion of 123.9%. The operational cash performance,
together with the divestment of AEF for $9.25m, resulted in a
GBP14.4m increase in net cash during the first half of the year and
a closing net cash balance of GBP39.1m. This strong cash position
provides funding to support our organic growth strategy and value
enhancing acquisitions.
Against this strong backdrop, the Board has increased the
interim dividend by 30% to 5.34p, in line with our policy, and
reflecting confidence in the full year performance.
Segmental Information
31 March
2017
Growth
31 March at constant
2018 (restated) Growth currency
GBPm GBPm % %
----------------------------- ----------- ------------ -------- -------------
Orders received
Avon Protection 64.2 65.8 (2.4%) 6.6%
milkrite | InterPuls 24.1 25.0 (3.6%) 1.0%
----------------------------- ----------- ------------ -------- -------------
Total 88.3 90.8 (2.7%) 5.0%
Closing order book
Avon Protection 37.5 31.8 17.9% 30.8%
milkrite | InterPuls 3.1 2.7 14.8% 16.1%
----------------------------- ----------- ------------ -------- -------------
Total 40.6 34.5 17.7% 29.6%
----------------------------- ----------- ------------ -------- -------------
Revenue
Avon Protection 53.1 53.7 (1.1%) 8.4%
milkrite | InterPuls 24.6 25.2 (2.4%) 0.8%
----------------------------- ----------- ------------ -------- -------------
Total 77.7 78.9 (1.5%) 5.9%
Operating profit
Avon Protection 8.7 7.6 14.4% 21.0%
milkrite | InterPuls 2.6 3.3 (21.2%) 1.2%
Unallocated corporate costs (1.4) (1.3) (7.7%) 0.3%
----------------------------- ----------- ------------ -------- -------------
Total 9.9 9.6 3.1% 18.4%
Adjusted operating profit
Avon Protection 9.2 8.0 15.0% 25.1%
milkrite | InterPuls 3.6 4.0 (10.0%) 2.3%
Unallocated corporate costs (1.2) (1.1) (9.1%) (15.8%)
----------------------------- ----------- ------------ -------- -------------
Total 11.6 10.9 6.4% 18.9%
Adjusted EBITDA
Avon Protection 11.7 11.6 0.8% 7.1%
milkrite | InterPuls 5.0 5.5 (9.1%) 0.2%
Unallocated corporate costs (1.2) (1.1) (9.1%) 13.2%
----------------------------- ----------- ------------ -------- -------------
Total 15.5 16.0 (3.1%) 6.6%
Adjusted EBITDA margin
Avon Protection 22.0% 21.6% 0.4% -
milkrite | InterPuls 20.3% 21.8% (1.5%) (0.5%)
----------------------------- ----------- ------------ -------- -------------
Total 19.9% 20.3% (0.4%) 0.2%
----------------------------- ----------- ------------ -------- -------------
Avon Protection
Orders received totalling GBP64.2m (2017: GBP65.8m) reflect a
constant currency growth of 6.6%, offset by the impact of the
strengthening pound. Revenue of GBP53.1m (2017: GBP53.7m) improved
by 8.4% on a constant currency basis with exceptional growth in Law
Enforcement of 42%, more than offsetting 6% declines in both
Military and Fire.
Adjusted operating profit increased by 15.0% to GBP9.2m (2017:
GBP8.0m) with adjusted EBITDA of GBP11.7m (2017: GBP11.6m). On a
constant currency basis, adjusted operating profit and adjusted
EBITDA grew by 25.1% and 7.1% respectively and our EBITDA margins
have remained stable.
Military
Military revenues of GBP27.3m (2017: GBP32.9m) were 5.5% lower
versus last half year, on a constant currency basis. DoD revenues
were flat, with higher spares sales offsetting the planned lower
shipment of M50 mask systems of 79,000 (2017: 93,000). The Rest of
the World order book has grown strongly in the period driven by the
initial MCM100 underwater rebreather orders. The lower first half
Rest of World revenue arises due to delivery timings being weighted
to the second half.
We received orders for 100,000 M50 mask systems in the first six
months, resulting in an order book of 70,000 systems as we entered
the second half of the year and, since 31 March 2018, we have
received a further order for 24,000 M50 mask systems. This has
provided us with visibility for the Military sales in the current
year as well as contributing to building the order book for 2019.
We continue to pursue a number of identified opportunities with the
DoD and Rest of World Military customers and anticipate further
orders, both for existing products as well from the new product
portfolio.
Law Enforcement
Law Enforcement revenue grew 42% on a constant currency basis to
GBP18.6m (2017: GBP12.5m). This was driven by strong performances
in hoods and mask systems in Europe, Middle East and Asia as we
continue to make progress in converting police forces to our
products. In North America, we also benefited from increased sales
of filters and spares to our expanding customer base. Initial sales
of our Powered Air range also contributed to the growth in the
period and we see the new product range as an exciting driver for
growth moving forward.
Fire
Fire revenue reduced to GBP7.2m (2017: GBP8.3m), a reduction of
6.3% on a constant currency basis, as the sector experienced
tougher market conditions in North America than 2017. We expect the
launch of the Magnum SCBA, later in the year, to upgrade the
existing product offering to our customers and support the medium
term outlook for revenue growth.
milkrite | InterPuls
Revenue of GBP24.6m (2017: GBP25.2m) increased by 0.8% on a
constant currency basis. Continued growth in Precison, Control
& Intelligence and Farm Services was offset by the performance
of Interface in North America due to tougher markets conditions as
a result of increased feed costs squeezing farmer margins.
Adjusted operating profit of GBP3.6m (2017: GBP4.0m) grew 2.3%
on a constant currency basis. Adjusted EBITDA of GBP5.0m (2017:
GBP5.5m) resulted in an adjusted EBITDA margin of 20.3%. With the
softer market conditions in North America, we will continue to
focus on managing the operating costs of the business in the second
half of the year.
Interface
Interface revenue of GBP17.2m (2017: GBP18.3m) was impacted by
weaker market conditions in North America following recent feed
cost increases which is expected to continue in the second half. As
a result of the performance in North America, Interface revenues
declined by 1.1% on a constant currency basis. Market conditions in
Europe, Middle East and Asia Pacific remain positive reflected in
constant currency revenue growth of 8.6% across these regions.
Precision, Control and Intelligence
Our PCI range and sales have continued to perform well across
our key markets. Revenue of GBP4.8m (2017: GBP4.8m) grew 5.3% at a
constant currency rate as dairy farmers continue to invest in our
PCI products to drive farm efficiency.
Farm Services
Farm Services has continued to show exceptional growth with
revenue of GBP2.6m (2017: GBP2.1m), up 28.7% at constant currency,
reflecting the ongoing success of Cluster Exchange which saw a 23%
growth in cluster points in the period. The extension of Farm
Services to include Pulsator Exchange and Tag Exchange continues to
progress well in line with expectations.
Research & Development expenditure
We continue to invest for the future and our total investment in
research and development (capitalised and expensed) amounted to
GBP4.4m (2017: GBP3.9m) as shown below. Total research and
development as a percentage of revenue was 5.7% (2017: 4.8%).
Half year Half year Year to
to to 30 Sep
31 Mar 2018 31 Mar 2017 2017
-------------------------------- ------------- ------------- ----------
Total research and development
expenditure GBP4.4m GBP3.9m GBP8.4m
Less customer funded (GBP1.4m) (GBP2.0m) (GBP4.6m)
-------------------------------- ------------- ------------- ----------
Group expenditure GBP3.0m GBP1.9m GBP3.8m
Capitalised (GBP2.6m) (GBP0.9m) (GBP2.7m)
-------------------------------- ------------- ------------- ----------
Income statement impact GBP0.4m GBP1.0m GBP1.1m
Amortisation GBP1.3m GBP2.0m GBP3.5m
Impairment - - GBP2.6m
-------------------------------- ------------- ------------- ----------
Total income statement impact GBP1.7m GBP3.0m GBP7.2m
-------------------------------- ------------- ------------- ----------
Revenue GBP77.7m GBP78.9m GBP159.2m
R&D spend as % of revenue 5.7% 4.8% 5.3%
-------------------------------- ------------- ------------- ----------
In Avon Protection the most significant investments have been in
the further development of the Magnum Self Contained Breathing
Apparatus and MCM100 underwater rebreather product ranges. In
milkrite | InterPuls, investment has been focussed on expanding our
Precision, Control and Intelligence (PCI) heavy duty product
range.
Profit for the Period
Half year Half year to
to 31 March 31 March 2017
2018 GBPm
GBPm (restated)
-------------------------------------------- ------------- ---------------
Adjusted operating profit 11.6 10.9
Adjustments (1.7) (1.3)
-------------------------------------------- ------------- ---------------
Operating profit 9.9 9.6
Net finance costs (0.5) (0.7)
-------------------------------------------- ------------- ---------------
Profit before taxation 9.4 8.9
Taxation (0.9) (1.4)
-------------------------------------------- ------------- ---------------
Profit from continuing operations 8.5 7.5
Profit/(loss) from discontinued operations 1.6 (0.3)
-------------------------------------------- ------------- ---------------
Profit for the period 10.1 7.2
-------------------------------------------- ------------- ---------------
Adjustments
Adjustments of GBP1.7m (2017: GBP1.3m) have been excluded from
adjusted operating profit and include amortisation of acquired
intangible assets of GBP1.5m (2017: GBP1.4m) and pension
administration costs of GBP0.2m (2017: GBP0.2m). Adjustments in
2017 included an exceptional credit of GBP0.3m for a
post-acquisition working capital adjustment relating to the
acquisition of InterPuls.
Taxation
The tax charge of GBP0.9m is comprised of an adjusted tax charge
of GBP1.6m, at an adjusted effective rate of 14%, offset by the tax
effects of the amortisation of acquired intangibles and the defined
benefit pension scheme.
Profit from Discontinued Operations
The profit from discontinued operations of GBP1.6m (2017:
(GBP0.3m)) is comprised of the profit after tax of AEF up to the
date of disposal on 30 March 2018 of GBP0.5m (2017: (0.3m)) and the
gain on disposal after tax of GBP1.1m.
Net Cash and Cash Flow
Underlying cash generated from continuing operations was
GBP19.2m with operating cash conversion from adjusted EBITDA
continuing to be strong at 123.9% (2017: 105.0%).
Total capital expenditure was GBP4.0m (2017: GBP2.7m) including
GBP2.6m of capitalised development costs. Dividends and the
purchase of own shares was GBP3.7m (2017: GBP2.9m) reflecting the
30% increase in the 2017 final dividend.
Net cash at the half year was GBP39.1m, including the GBP6.6m
proceeds from the sale of AEF, GBP14.4m higher than the 2017 year
end.
Dividends
The Board has declared an interim dividend of 5.34p per ordinary
share, an increase of 30% on the 2017 interim dividend. This will
be paid on 7 September 2018 to shareholders on the register on 10
August 2018.
Outlook
We have delivered strong financial results, with underlying
performance more than offsetting currency headwinds, whilst
continuing to build the order book. We have also made further
progress on the longer-term growth opportunities for our expanding
product portfolio.
The performance reflects the benefits of the strategic actions
being implemented to enable the Group to continue to grow
sustainably in our core markets. Building on this platform, and
with the momentum from our expanding product portfolio, the Board
remains confident on delivery of its current year expectations and
is excited by the medium-term prospects for the Group.
Paul McDonald Nick Keveth
Chief Executive Officer Chief Financial Officer
2 May 2018 2 May 2018
Statement of Directors' Responsibilities
The Directors confirm that this condensed consolidated interim
financial information has been prepared in accordance with
International Accounting Standard 34, 'Interim Financial Reporting'
as adopted by the European Union, and that the interim management
report herein includes a fair review of the information required by
DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the first six months and their impact on the condensed consolidated
interim financial information, and a description of the principal
risks and uncertainties for the remaining six months of the
financial year; and
-- material related party transactions in the first six months
and any material changes in the related party transactions
described in the last annual report.
Miles Ingrey-Counter
Company Secretary
2 May 2018
Forward-looking statements
Certain statements in this half year report are
forward--looking. Although the Group believes that the expectations
reflected in these forward--looking statements are reasonable, we
can give no assurance that these expectations will prove to have
been correct. Because these statements involve risks and
uncertainties, actual results may differ materially from those
expressed or implied by these forward--looking statements.
We undertake no obligation to update any forward--looking
statements whether as a result of new information, future events or
otherwise.
Company website
The interim statement is available on the Company's website at
www.avon-rubber.com. The maintenance and integrity of the website
is the responsibility of the Directors. Legislation in the United
Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Change of auditor
As reported in our 2017 Annual Report, PricewaterhouseCoopers
LLP ('PwC') have been the Company's external auditor for well over
20 years and the Board requested the Audit Committee run a tender
process in early 2018. Following this process the Board have
selected KPMG LLP to be the Company's external auditor for the year
ending 30 September 2019. PwC will continue to act as auditors for
the current financial year. At the 2019 AGM shareholders will be
invited to vote on the appointment of KPMG LLP.
Consolidated Statement of Comprehensive Income
Half year to 31 March 2018 Half year to 31 March 2017 Year to 30 Sep 2017
Adjusted Adjustments* Total Adjusted Adjustments* Total Adjusted Adjustments* Total
(restated) (restated) (restated) (restated)
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------- ----- --------- ------------- ------- ----------- ------------- ----------- ----------- ------------- -----------
Continuing
operations
Revenue 3 77.7 - 77.7 78.9 - 78.9 159.2 - 159.2
Cost of sales (48.9) - (48.9) (48.7) - (48.7) (97.6) - (97.6)
----------------- ----- --------- ------------- ------- ----------- ------------- ----------- ----------- ------------- -----------
Gross profit 28.8 - 28.8 30.2 - 30.2 61.6 - 61.6
Selling and
distribution
costs (9.7) - (9.7) (10.5) - (10.5) (19.9) - (19.9)
General and
administrative
expenses (7.5) (1.7) (9.2) (8.8) (1.3) (10.1) (15.6) (6.0) (21.6)
Operating profit 3 11.6 (1.7) 9.9 10.9 (1.3) 9.6 26.1 (6.0) 20.1
----------------- ----- --------- ------------- ------- ----------- ------------- ----------- ----------- ------------- -----------
Operating
profit is
analysed as:
Before
depreciation
and
amortisation 15.5 (0.2) 15.3 16.0 0.1 16.1 35.7 (0.1) 35.6
Depreciation and
amortisation (3.9) (1.5) (5.4) (5.1) (1.4) (6.5) (9.6) (5.9) (15.5)
----------------- ----- --------- ------------- ------- ----------- ------------- ----------- ----------- ------------- -----------
Operating profit 11.6 (1.7) 9.9 10.9 (1.3) 9.6 26.1 (6.0) 20.1
----------------- ----- --------- ------------- ------- ----------- ------------- ----------- ----------- ------------- -----------
Interest income 7 0.1 - 0.1 - - - 0.1 - 0.1
Finance costs 7 (0.1) - (0.1) (0.1) - (0.1) (0.3) - (0.3)
Other finance
expense 7 - (0.5) (0.5) (0.1) (0.5) (0.6) - (1.0) (1.0)
----------------- ----- --------- ------------- ------- ----------- ------------- ----------- ----------- ------------- -----------
Profit before
taxation 11.6 (2.2) 9.4 10.7 (1.8) 8.9 25.9 (7.0) 18.9
Taxation 8 (1.6) 0.7 (0.9) (2.0) 0.6 (1.4) (0.4) 3.3 2.9
----------------- ----- --------- ------------- ------- ----------- ------------- ----------- ----------- ------------- -----------
Profit for the
period
from continuing
operations 10.0 (1.5) 8.5 8.7 (1.2) 7.5 25.5 (3.7) 21.8
Profit/(loss)
from
discontinued
operations 6 - 1.6 1.6 - (0.3) (0.3) - (0.3) (0.3)
----------------- ----- --------- ------------- ------- ----------- ------------- ----------- ----------- ------------- -----------
Profit for the
period 10.0 0.1 10.1 8.7 (1.5) 7.2 25.5 (4.0) 21.5
----------------- ----- --------- ------------- ------- ----------- ------------- ----------- ----------- ------------- -----------
*See note 5 for further details of adjustments
Consolidated Statement of Comprehensive Income (continued)
Half year to 31 March 2018 Half year to 31 March 2017 Year to 30 Sep 2017
Adjusted Adjustments* Total Adjusted Adjustments* Total Adjusted Adjustments* Total
(restated) (restated) (restated) (restated)
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------- ----- --------- ------------- ------ ----------- ------------- ----------- ----------- ------------- -----------
Other
comprehensive
income
Actuarial
gain/(loss)
recognised in
retirement
benefit
scheme (**) - 1.5 1.5 - (0.4) (0.4) - (3.8) (3.8)
Deferred tax
relating
to retirement
benefit
scheme (**) - (0.3) (0.3) - 0.1 0.1 - 0.6 0.6
Net exchange
differences
offset in
reserves
(***) (2.3) - (2.3) 1.1 - 1.1 (2.3) - (2.3)
Cash flow
hedges (***) 0.2 - 0.2 0.5 - 0.5 1.1 - 1.1
Tax relating
to exchange
differences
offset in
reserves
(***) - - - - - - 0.2 - 0.2
--------------- ----- --------- ------------- ------ ----------- ------------- -----------
Other
comprehensive
income
for the
period, net
of
taxation (2.1) 1.2 (0.9) 1.6 (0.3) 1.3 (1.0) (3.2) (4.2)
Profit for the
period 10.0 0.1 10.1 8.7 (1.5) 7.2 25.5 (4.0) 21.5
--------------- ----- --------- ------------- ------ ----------- ------------- ----------- ----------- ------------- -----------
Total
comprehensive
income
for the
period 7.9 1.3 9.2 10.3 (1.8) 8.5 24.5 (7.2) 17.3
--------------- ----- --------- ------------- ------ ----------- ------------- ----------- ----------- ------------- -----------
Earnings per
share
Basic 10 32.8p 0.3p 33.1p 28.6p (4.9)p 23.7p 83.8p (13.2)p 70.6p
Diluted 10 32.6p 0.3p 32.9p 28.2p (4.9)p 23.3p 83.3p (13.1)p 70.2p
--------------- ----- --------- ------------- ------ ----------- ------------- ----------- ----------- ------------- -----------
Earnings per
share from
continuing
operations
Basic 10 32.8p (4.9)p 27.9p 28.6p (3.9)p 24.7p 83.8p (12.2)p 71.6p
Diluted 10 32.6p (4.9)p 27.7p 28.2p (3.9)p 24.3p 83.3p (12.1)p 71.2p
--------------- ----- --------- ------------- ------ ----------- ------------- ----------- ----------- ------------- -----------
* See note 5 for further details of adjustments
** Items that are not subsequently reclassified to the income
statement
***Items that may be subsequently reclassified to the income
statement
The Statement of Comprehensive Income for half year and full
year 2017 has been restated to present AEF as a discontinued
operation, and half year 2017 has also been restated to correct the
charge for share based payments.
Consolidated Balance Sheet
As at As at As at
31 Mar 31 Mar 30 Sep
2018 2017 2017
Note GBPm GBPm GBPm
---------------------------------------- ----- -------- -------- --------
Assets
Non-current assets
Goodwill and acquired intangibles 21.2 23.7 23.4
Development expenditure and computer
software 17.9 21.7 17.0
Property, plant and equipment 21.9 29.1 26.3
Deferred tax assets 8.1 7.8 8.2
---------------------------------------- ----- -------- -------- --------
69.1 82.3 74.9
Current assets
Inventories 21.8 21.8 21.8
Trade and other receivables 18.8 19.8 23.8
Derivative financial instruments 0.4 - 0.2
Cash and cash equivalents 14 40.4 14.8 26.5
---------------------------------------- ----- -------- -------- --------
81.4 56.4 72.3
---------------------------------------- ----- -------- -------- --------
Liabilities
Current liabilities
Borrowings 14 1.3 2.2 1.8
Trade and other payables 28.6 26.1 30.1
Derivative financial instruments - 0.3 -
Provisions for liabilities and charges 11 0.3 0.7 0.3
Current tax liabilities 7.1 9.9 6.8
---------------------------------------- ----- -------- -------- --------
37.3 39.2 39.0
---------------------------------------- ----- -------- -------- --------
Net current assets 44.1 17.2 33.3
---------------------------------------- ----- -------- -------- --------
Non-current liabilities
Deferred tax liabilities 5.8 9.2 6.8
Retirement benefit obligations 42.5 40.7 44.1
Provisions for liabilities and charges 11 3.0 1.6 1.7
---------------------------------------- ----- -------- -------- --------
51.3 51.5 52.6
---------------------------------------- ----- -------- -------- --------
Net assets 61.9 48.0 55.6
---------------------------------------- ----- -------- -------- --------
Shareholders' equity
Ordinary shares 12 31.0 31.0 31.0
Share premium account 12 34.7 34.7 34.7
Capital redemption reserve 0.5 0.5 0.5
Translation reserve 4.2 9.7 6.5
Accumulated losses (8.5) (27.9) (17.1)
---------------------------------------- ----- -------- -------- --------
Total equity 61.9 48.0 55.6
---------------------------------------- ----- -------- -------- --------
Consolidated Cash Flow Statement
Half year Half year Year to
to 31 Mar to 31 Mar 30 Sep
2018 2017 (restated) 2017 (restated)
Note GBPm GBPm GBPm
------------------------------------------- ----- ----------- ----------------- -----------------
Cash flows from operating activities
------------------------------------------- ----- ----------- ----------------- -----------------
Cash flows from continuing operating
activities before the impact of
exceptional items 13 19.2 16.8 35.0
Cash impact of exceptional items - 0.3 0.3
------------------------------------------- ----- ----------- ----------------- -----------------
Cash flows from continuing operations 19.2 17.1 35.3
Cash flows from discontinued operations (0.2) 0.2 0.3
------------------------------------------- ----- ----------- ----------------- -----------------
Cash generated from operations 13 19.0 17.3 35.6
Interest income received 0.1 - 0.1
Finance costs paid (0.1) (0.1) (0.2)
Retirement benefit deficit recovery
contributions (0.8) (0.4) (1.0)
Tax paid (2.0) (0.7) (2.0)
------------------------------------------- ----- ----------- ----------------- -----------------
Net cash flows from operating activities 16.2 16.1 32.5
------------------------------------------- ----- ----------- ----------------- -----------------
Cash flows from/(used in) investing
activities
Proceeds from disposal of discontinued
operations 6.5 - -
Purchase of property, plant and
equipment (1.4) (1.7) (2.6)
Capitalised development costs and
purchased software (2.6) (1.0) (2.9)
Net cash flows from/(used in) investing
activities 2.5 (2.7) (5.5)
------------------------------------------- ----- ----------- ----------------- -----------------
Cash flows used in financing activities
Net movement in borrowings (0.5) (0.3) (0.8)
Dividends paid to shareholders (2.5) (1.9) (3.2)
Payments to acquire own shares (1.2) (1.0) (1.0)
------------------------------------------- ----- ----------- ----------------- -----------------
Net cash flows used in financing
activities (4.2) (3.2) (5.0)
------------------------------------------- ----- ----------- ----------------- -----------------
Net increase in cash and cash equivalents 14.5 10.2 22.0
Cash and cash equivalents at beginning
of the period 26.5 4.5 4.5
Effects of exchange rate changes (0.6) 0.1 -
------------------------------------------- ----- ----------- ----------------- -----------------
Cash and cash equivalents at end
of the period 14 40.4 14.8 26.5
------------------------------------------- ----- ----------- ----------------- -----------------
Consolidated Statement of Changes in Equity
Total
Share Share Other Accumulated equity
capital premium reserves* losses (restated) (restated)
GBPm GBPm GBPm GBPm GBPm
----------------------------------------- --------- --------- ----------- ------------------- ------------
At 30 September 2016 31.0 34.7 9.1 (32.8) 42.0
Profit for the period - - 7.2 7.2
Net exchange differences offset
in reserves - - 1.1 - 1.1
Cash flow hedges - - - 0.5 0.5
Actuarial loss recognised on retirement
benefit scheme - - - (0.4) (0.4)
Deferred tax relating to retirement
benefit scheme - - - 0.1 0.1
----------------------------------------- --------- --------- ----------- ------------------- ------------
Total comprehensive income for the
period - - 1.1 7.4 8.5
Dividends paid - - - (1.9) (1.9)
Movement in shares held by the employee
benefit trust - - - (1.0) (1.0)
Movement in respect of employee
share schemes - - - 0.4 0.4
At 31 March 2017 31.0 34.7 10.2 (27.9) 48.0
Profit for the period - - 14.3 14.3
Net exchange differences offset
in reserves - - (3.4) - (3.4)
Tax relating to exchange differences
offset in reserves - - 0.2 - 0.2
Cash flow hedges - - - 0.6 0.6
Actuarial loss recognised on retirement
benefit scheme - - - (3.4) (3.4)
Deferred tax relating to retirement
benefit scheme - - - 0.5 0.5
----------------------------------------- --------- --------- ----------- ------------------- ------------
Total comprehensive income for the
period - - (3.2) 12.0 8.8
Dividends paid - - - (1.3) (1.3)
Movement in respect of employee
share schemes - - - 0.5 0.5
Deferred tax relating to employee
share schemes - - - (0.4) (0.4)
At 30 September 2017 31.0 34.7 7.0 (17.1) 55.6
Profit for the period - - - 10.1 10.1
Net exchange differences offset
in reserves - - (2.3) - (2.3)
Cash flow hedges - - - 0.2 0.2
Actuarial gain recognised on retirement
benefit scheme - - - 1.5 1.5
Deferred tax relating to retirement
benefit scheme - - - (0.3) (0.3)
----------------------------------------- --------- --------- ----------- ------------------- ------------
Total comprehensive income for the
period - - (2.3) 11.5 9.2
Dividends paid - - - (2.5) (2.5)
Movement in shares held by the employee
benefit trust - - - (1.0) (1.0)
Movement in respect of employee
share schemes - - - 0.6 0.6
At 31 March 2018 31.0 34.7 4.7 (8.5) 61.9
----------------------------------------- --------- --------- ----------- ------------------- ------------
*Other reserves consist of the capital redemption reserve of
GBP0.5m (31 March 2017: GBP0.5m, 30 September 2017: GBP0.5m) and
the translation reserve of GBP4.2m (31 March 2017: GBP9.7m, 30
September 2017: GBP6.5m).
Notes to the Interim Financial Statements
1. General information
The company is a limited liability company incorporated in
England and domiciled in the UK. The address of its registered
office is Hampton Park West, Semington Road, Melksham, Wiltshire,
SN12 6NB. The company has its primary listing on the London Stock
Exchange.
This unaudited condensed consolidated interim financial
information was approved for issue on 2 May 2018.
These interim financial results do not comprise statutory
accounts within the meaning of Section 434 of the Companies Act
2006. Statutory accounts for the year ended 30 September 2017 were
approved by the Board of Directors on 15 November 2017 and
delivered to the Registrar of Companies. The report of the auditors
on those accounts was unqualified, did not contain an emphasis of
matter paragraph and did not contain any statement under Section
498 of the Companies Act 2006.
2. Basis of preparation
This condensed consolidated interim financial information for
the half year ended 31 March 2018 has been prepared in accordance
with the Disclosure and Transparency Rules of the Financial Conduct
Authority and with IAS 34, 'Interim financial reporting' as adopted
by the European Union. These interim financial results should be
read in conjunction with the annual financial statements for the
year ended 30 September 2017, which have been prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union.
Having considered the Group's funding position, budgets for 2018
and three year plan, the Directors have formed a judgement that
there is a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future. For this reason the Directors continue to adopt the going
concern basis in preparing the condensed consolidated interim
financial information.
The financial information presented in this Interim Report has
been prepared in accordance with the accounting policies expected
to be used in preparing the 2018 Annual Report and Accounts which
do not differ significantly from those used in the preparation of
the 2017 Annual Report and Accounts.
3. Segment information
The Group has two clearly defined business segments, Protection
and Dairy.
Half year to 31 March 2018
Protection Dairy Unallocated Group
GBPm GBPm GBPm GBPm
------------------------------------- ----------- ------ ------------ ------
Revenue 53.1 24.6 - 77.7
------------------------------------- ----------- ------ ------------ ------
Segment result before depreciation,
amortisation, exceptional
items and defined benefit
pension scheme costs 11.7 5.0 (1.2) 15.5
Depreciation of property,
plant and equipment (1.4) (1.2) - (2.6)
Amortisation of development
costs and software (1.1) (0.2) - (1.3)
------------------------------------- ----------- ------ ------------ ------
Segment result before amortisation
of acquired intangibles,
exceptional items and defined
benefit pension scheme costs 9.2 3.6 (1.2) 11.6
Amortisation of acquired
intangibles (0.5) (1.0) - (1.5)
Exceptional items - - - -
Defined benefit pension scheme
costs - - (0.2) (0.2)
------------------------------------- ----------- ------ ------------ ------
Segment result 8.7 2.6 (1.4) 9.9
Interest income 0.1
Finance costs (0.1)
Other finance expense (0.5)
------------------------------------- ----------- ------ ------------ ------
Profit before taxation 9.4
Taxation (0.9)
------------------------------------- ----------- ------ ------------ ------
Profit for the period from
continuing operations 8.5
------------------------------------- ----------- ------ ------------ ------
Half year to 31 March 2017
Protection Group
(restated) Dairy Unallocated (restated)
GBPm GBPm GBPm GBPm
------------------------------------- ------------ ------ ------------ ------------
Revenue 53.7 25.2 - 78.9
------------------------------------- ------------ ------ ------------ ------------
Segment result before depreciation,
amortisation and defined
benefit pension scheme credit 11.6 5.5 (1.1) 16.0
Depreciation of property,
plant and equipment (1.8) (1.1) - (2.9)
Amortisation of development
costs and software (1.8) (0.4) - (2.2)
------------------------------------- ------------ ------ ------------ ------------
Segment result before amortisation
of acquired intangibles and
defined benefit pension scheme
credit 8.0 4.0 (1.1) 10.9
Amortisation of acquired
intangibles (0.4) (1.0) - (1.4)
Exceptional items - 0.3 - 0.3
Defined benefit pension scheme
costs - - (0.2) (0.2)
------------------------------------- ------------ ------ ------------ ------------
Segment result 7.6 3.3 (1.3) 9.6
Finance costs (0.1)
Other finance expense (0.6)
------------------------------------- ------------ ------ ------------ ------------
Profit before taxation 8.9
Taxation (1.4)
------------------------------------- ------------ ------ ------------ ------------
Profit for the period from
continuing operations 7.5
------------------------------------- ------------ ------ ------------ ------------
Year ended 30 September 2017
Protection Group
(restated) Dairy Unallocated (restated)
GBPm GBPm GBPm GBPm
------------------------------------- ------------ ------ ------------ ------------
Revenue 109.8 49.4 - 159.2
------------------------------------- ------------ ------ ------------ ------------
Segment result before depreciation,
amortisation, exceptional
items, acquisition costs
and defined benefit pension
scheme costs 26.8 10.9 (2.0) 35.7
Depreciation of property,
plant and equipment (3.4) (2.3) - (5.7)
Amortisation of development
costs and software (3.3) (0.6) - (3.9)
------------------------------------- ------------ ------ ------------ ------------
Segment result before amortisation
of acquired intangibles,
exceptional items, acquisition
costs and defined benefit
pension scheme costs 20.1 8.0 (2.0) 26.1
Amortisation of acquired
intangibles (1.0) (2.0) - (3.0)
Exceptional items and acquisition
costs (2.9) 0.3 - (2.6)
Defined benefit pension scheme
costs - - (0.4) (0.4)
------------------------------------- ------------ ------ ------------ ------------
Segment result 16.2 6.3 (2.4) 20.1
Interest income 0.1
Finance costs (0.3)
Other finance expense (1.0)
------------------------------------- ------------ ------ ------------ ------------
Profit before taxation 18.9
Taxation 2.9
------------------------------------- ------------ ------ ------------ ------------
Profit for the year from
continuing operations 21.8
------------------------------------- ------------ ------ ------------ ------------
Revenue by origin
Year to
Half year
to 31 March 30 Sep
2017 2017
Half year
to 31 March
2018 (restated) (restated)
GBPm GBPm GBPm
------------------------ ------------- ------------- ------------
Europe 21.3 17.3 40.2
North America 56.4 61.6 119.0
Continuing operations 77.7 78.9 159.2
------------------------ ------------- ------------- ------------
4. Adjusted Performance Measures
This document contains certain financial measures that are not
defined or recognised under IFRS including adjusted operating
profit and adjusted earnings per share. The Directors believe that
adjusted measures provide a more useful comparison of business
trends and performance. These adjusted measures exclude the effect
of exceptional items, defined benefit scheme pension costs, the
amortisation of acquired intangible assets and discontinued
operations. The Group uses these measures for planning, budgeting
and reporting purposes and for its internal assessment of the
operational performance of individual businesses within the Group.
Given the term adjusted is not defined under IFRS, the adjusted
measures may not be comparable with similarly titled measures used
by other companies.
The following tables show the adjustments made to arrive at
adjusted operating profit, adjusted profit for the period and
adjusted basic earnings per share.
Half year to 31 March Half year to 31 March
2018 2017
Protection Dairy Group Protection Dairy Group
Adjusted operating (restated)
profit GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- ----------- ------ ------ ----------- ------ ------------
Operating profit 8.7 2.6 9.9 7.6 3.3 9.6
Amortisation of
acquired intangibles 0.5 1.0 1.5 0.4 1.0 1.4
Defined benefit
pension administration
costs - - 0.2 - - 0.2
Post-acquisition
working capital
adjustment - - - - (0.3) (0.3)
------------------------- ----------- ------ ------ ----------- ------ ------------
Adjusted operating
profit 9.2 3.6 11.6 8.0 4.0 10.9
------------------------- ----------- ------ ------ ----------- ------ ------------
Half year Half year
to 31 March to 31 March
2018 2017
(restated)
Adjusted basic earnings per share GBPm GBPm
-------------------------------------------------- ------------- -------------
Profit for the period 10.1 7.2
Amortisation of acquired intangibles 1.5 1.4
Defined benefit pension administration costs 0.2 0.2
Post-acquisition working capital adjustment - (0.3)
Defined benefit pension net interest cost 0.5 0.5
Tax on exceptional items (0.7) (0.6)
(Profit)/loss from discontinued operations (1.6) 0.3
-------------------------------------------------- ------------- -------------
Adjusted profit for the year 10.0 8.7
-------------------------------------------------- ------------- -------------
Weighted average number of shares (in thousands) 30,498 30,410
-------------------------------------------------- ------------- -------------
Basic earnings per share (in pence) 33.1 23.7
-------------------------------------------------- ------------- -------------
Adjusted basic earnings per share (in pence) 32.8 28.6
-------------------------------------------------- ------------- -------------
5. Adjustments
Half year Half year Year to
to 31 March to 31 March 30 Sep
2018 2017 2017
GBPm GBPm GBPm
----------------------------------------------- ------------- ------------- --------
Amortisation of acquired intangible
assets (1.5) (1.4) (3.0)
Exceptional impairment of capitalised
development expenditure - - (2.6)
Exceptional impairment of plant
and machinery - - (0.3)
Exceptional post-acquisition working
capital adjustment - 0.3 0.3
Defined benefit pension scheme administration
costs (0.2) (0.2) (0.4)
(1.7) (1.3) (6.0)
----------------------------------------------- ------------- ------------- --------
The tax impact of the above gives rise to a deferred tax credit
to the income statement of GBP0.6m (31 March 2017: GBP0.6m, 30
September 2017: GBP1.0m).
Defined benefit pension scheme costs relate to administrative
expenses of the scheme which is closed to future accrual. GBP0.5m
of other finance expense relating to the pension scheme is also
treated as an adjustment (31 March 2017: GBP0.5m, 30 September
2017: GBP1.0m).
6. Discontinued operations
In March 2018, the Group disposed of Avon Engineered
Fabrications, Inc. its US based hovercraft skirt and bulk liquid
storage tank business. This non-core business was included in the
Protection segment. The business has been classified as
discontinued and prior periods have been restated to reflect this.
The results of discontinued operations are as follows:
Half year Half year Year to
to 31 March to 31 March 30 Sep
2018 2017 2017
GBPm GBPm GBPm
----------------------------------- ------------- ------------- --------
Profit before taxation 0.7 (0.3) (0.3)
Taxation (0.2) - -
----------------------------------- ------------- ------------- --------
Profit for the period 0.5 (0.3) (0.3)
Gain on disposal 1.4 - -
Tax on gain on disposal (0.3) - -
----------------------------------- ------------- ------------- --------
Profit/(loss) from discontinued
operations 1.6 (0.3) (0.3)
----------------------------------- ------------- ------------- --------
Basic earnings/(loss) per share 5.2p (1.0)p (0.1)p
----------------------------------- ------------- ------------- --------
Diluted earnings/(loss) per share 5.2p (1.0)p (0.1)p
----------------------------------- ------------- ------------- --------
The gain on disposal is a provisional figure and may be adjusted
when final working capital balances have been agreed with the
purchaser. Any adjustments that may be required will be recorded in
discontinued operations in the future.
Cash flows from discontinued operations included in the cash
flow statement are as follows:
Half year Half year Year to
to 31 March to 31 March 30 Sep
2018 2017 2017
GBPm GBPm GBPm
--------------------------------------------- ------------- ------------- --------
Net cash flows (used in)/ from operating
activities (0.2) 0.2 0.3
Net cash flows from investing activities 6.5 - -
Net cash flows from financing activities - - -
Net cash flows from discontinued operations 6.3 0.2 0.3
--------------------------------------------- ------------- ------------- --------
7. Finance income and costs
Half year Half year Year to
to to 30 Sep
31 Mar 2018 31 Mar 2017 2017
GBPm GBPm GBPm
------------------------------------ ------------- ------------- --------
Interest payable on bank loans and
overdrafts (0.1) (0.1) (0.3)
Finance income 0.1 - 0.1
------------------------------------ ------------- ------------- --------
- (0.1) (0.2)
------------------------------------ ------------- ------------- --------
Other finance expense
Half year Half year Year to
to to 30 Sep
31 Mar 2018 31 Mar 2017 2017
GBPm GBPm GBPm
--------------------------------------- ------------- ------------- --------
Net interest cost: UK defined benefit
pension scheme (0.5) (0.5) (1.0)
Provisions: Unwinding of discount - (0.1) -
--------------------------------------- ------------- ------------- --------
(0.5) (0.6) (1.0)
--------------------------------------- ------------- ------------- --------
8. Taxation
Half year Half year Year to
to to 30 Sep
31 Mar 2018 31 Mar 2017 2017
GBPm GBPm GBPm
------------------------------ ------------- ------------- --------
Adjusted tax (charge)/credit (1.6) (2.0) (0.4)
Tax credit on Adjustments 0.7 0.6 3.3
------------------------------ ------------- ------------- --------
Total tax (charge)/credit (0.9) (1.4) 2.9
------------------------------ ------------- ------------- --------
The effective tax rate for the period is a charge of 10% (31
March 2017: charge of 16%, 30 September 2017: credit of 15%).
The adjusted effective tax rate, where the tax charge and the
profit before taxation are adjusted for exceptional items, the
amortisation of acquired intangibles and defined benefit pension
scheme costs is 14% (31 March 2017: 19%, 30 September 2017:
2%).
9. Dividends
On 1 February 2018, the shareholders approved a final dividend
of 8.21p per qualifying ordinary share in respect of the year ended
30 September 2017. This was paid on 16 March 2018 absorbing GBP2.5m
of shareholders' funds.
The Board of Directors has declared an interim dividend of 5.34p
(2016: 4.11p) per qualifying ordinary share in respect of the year
ended 30 September 2018. This will be paid on 7 September 2018 to
shareholders on the register at the close of business on 10 August
2018. In accordance with accounting standards, this dividend has
not been provided for. It will be recognised in shareholders' funds
in the year to 30 September 2018 and is expected to absorb GBP1.6m
(2016: GBP1.2m) of shareholders' funds.
10. Earnings per share
Basic earnings per share is based on a profit attributable to
ordinary shareholders of GBP10.1m (2017: GBP7.2m) and 30,498,000
(2017: 30,410,000) ordinary shares being the weighted average
number of shares in issue during the period.
Adjusted earnings per share is based on a profit from continuing
operations attributable to ordinary shareholders of GBP10.0m (2017:
GBP8.7m) after adding back amortisation of acquired intangible
assets, exceptional items and defined benefit pension scheme
costs.
The Company has 182,000 (2017: 463,000) potentially dilutive
ordinary shares in respect of the Performance Share Plan.
11. Provisions for liabilities and charges
Property obligations
GBPm
-------------------------------------- ---------------------
Balance at 30 September 2017 2.0
Reclassification from other payables 1.5
Payments in period (0.2)
-------------------------------------- ---------------------
Balance at 31 March 2018 3.3
-------------------------------------- ---------------------
Property obligations include an onerous lease provision and
obligations relating to former premises of the Group which are
subject to dilapidation risks. Property provisions are subject to
uncertainty in respect of the utilisation, non-utilisation, or
subletting of surplus leasehold property and the final negotiated
settlement of any dilapidation claims with landlords.
12. Share capital
Half year Half year Year to
to 31 Mar to 30 Sep
2018 31 Mar 2017 2017
------------------------------ ----------- ------------- --------
Number of shares (thousands) 31,023 31,023 31,023
Ordinary shares (GBPm) 31.0 31.0 31.0
Share premium (GBPm) 34.7 34.7 34.7
------------------------------ ----------- ------------- --------
During the period 150,703 ordinary shares with a nominal value
of GBP1 each were purchased by the Avon Rubber p.l.c. Employer
Share Ownership Trust.
13. Cash flows from operations
Half year Half year Year to
to 31 Mar to 31 Mar
2018 2017
(restated) 30 Sep 2017
(restated)
GBPm GBPm GBPm
---------------------------------------- ----------- ------------ -------------
Continuing operations
Profit for the period 8.5 7.5 21.8
Adjustments for:
Taxation 0.9 1.4 (2.9)
Depreciation 2.6 2.9 5.7
Amortisation of intangible assets 2.8 3.6 6.9
Impairment of plant and machinery - - 0.3
Impairment of development costs - - 2.6
Defined benefit pension scheme costs 0.2 0.2 0.4
Interest income (0.1) - (0.1)
Finance costs 0.1 0.1 0.3
Other finance expense 0.5 0.6 1.0
Movement in respect of employee
share scheme 0.6 0.3 0.9
Movements in working capital and
provisions 3.1 0.5 (1.6)
Other movements - - -
---------------------------------------- ----------- ------------ -------------
Cash flows from continuing operations 19.2 17.1 35.3
---------------------------------------- ----------- ------------ -------------
Analysed as:
Cash flows from continuing operations
prior to the effect of exceptional
operating items 19.2 16.8 35.0
Cash effect of exceptional operating
items - 0.3 0.3
---------------------------------------- ----------- ------------ -------------
Cash flows (used in)/from discontinued
operations (0.2) 0.2 0.3
---------------------------------------- ----------- ------------ -------------
Cash flows from operations 19.0 17.3 35.6
---------------------------------------- ----------- ------------ -------------
14. Analysis of cash and debt
As at Exchange As at
30 Sep 2017 Cash Flow movements 31 Mar 2018
GBPm GBPm GBPm GBPm
-------------------------- ------------- ---------- ----------- -------------
Cash at bank and in hand 26.5 14.5 (0.6) 40.4
Debt due in less than 1
year (1.8) 0.5 - (1.3)
24.7 15.0 (0.6) 39.1
-------------------------- ------------- ---------- ----------- -------------
Borrowing facilities
As at As at As at
31 Mar 2018 31 Mar 2017 30 Sep 2017
GBPm GBPm GBPm
------------------------------------ ------------- ------------- -------------
Total undrawn committed facilities 26.7 31.6 29.9
Bank loans and overdrafts utilised 1.3 2.2 1.8
Utilised in respect of guarantees 1.7 0.3 0.3
------------------------------------ ------------- ------------- -------------
Total Group facilities (excluding
accordion option of $35m) 29.7 34.1 32.0
------------------------------------ ------------- ------------- -------------
All facilities are at floating interest rates.
The Group has agreed bank facilities with Barclays Bank and
Comerica Bank comprising a revolving credit facility of $40m with a
$35m accordion option. The facilities expire on 30 November 2019.
This facility is priced on the dollar LIBOR plus margin of 1.25%
and includes financial covenants which are measured on a quarterly
basis. The Group was in compliance with its financial covenants
during 2018 and 2017.
15. Disposal
In March 2018, the Group disposed of Avon Engineered
Fabrications, Inc. Further details are given in Note 6.
GBPm
---------------------------------------------- ------
Cash consideration received 6.6
Consideration receivable 0.6
---------------------------------------------- ------
Total Consideration 7.2
Net assets disposed (5.1)
Disposal cost (0.7)
Recycling of deferred foreign exchange gains -
---------------------------------------------- ------
Gain on disposal 1.4
---------------------------------------------- ------
Assets and liabilities at the date of disposal were:
GBPm
------------------------------- ------
Intangible assets 0.1
Property, plant and equipment 2.4
Inventories 1.2
Receivables 2.0
Payables (0.6)
------------------------------- ------
Total net assets disposed 5.1
------------------------------- ------
16. Exchange rates
The following significant exchange rates applied during the
period.
Average Closing Average Closing Average Closing
rate rate rate rate rate rate
H1 2018 H1 2018 H1 2017 H1 2017 FY 2017 FY 2017
----------- -------- -------- -------- -------- -------- --------
US dollar 1.359 1.408 1.240 1.250 1.267 1.339
Euro 1.130 1.143 1.157 1.169 1.147 1.134
----------- -------- -------- -------- -------- -------- --------
Fair value of financial instruments
The fair value of forward exchange contracts is determined by
using valuation techniques using period end spot rates, adjusted
for the forward points to the contract's value date.
17. Principal risks and uncertainties
The principal risks and uncertainties impacting the Group are
described on pages 32-35 of our Annual Report 2017 and remain
unchanged at 31 March 2018.
They include: projects failure/acquisition integration, market
threat, talent management, product development, financial
management, customer dependency, business interruption - supply
chain, non-compliance with legislation and quality risks and
product recall.
18. Related party transactions
There were no related party transactions during the period or
outstanding at the end of the period (2017: GBPnil) other than
compensation of key management personnel which will be disclosed in
the Group's Annual Report for the year ending 30 September
2018.
19. Restatement of prior periods
The Statement of Comprehensive Income for half year and full
year 2017 has been restated to present AEF as a discontinued
operation. The half year 2017 has also been restated to correct the
charge for share based payments. This is consistent with the
restatement of the Income Statement for the year ended 30 September
2016 which was disclosed in the 2017 Annual Report. Further
explanation is given on page 119 of our 2017 Annual Report. The
effect of these restatements is summarised below.
Half Year to 31 March 2017 Year to 30 Sep 2017
As previously Share based AEF Restated As previously AEF Restated
reported payments discontinued reported discontinued
operations operations
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------- -------------- ------------ --------------- --------- -------------- -------------- ---------
Adjusted
Orders
received 90.7 - - 90.7 173.9 (7.9) 166.0
Closing order
book 35.0 - (0.5) 34.5 34.0 (4.0) 30.0
Revenue 81.1 - (2.2) 78.9 163.2 (4.0) 159.2
EBITDA 16.5 (0.3) (0.2) 16.0 36.0 (0.3) 35.7
Operating
profit 10.9 (0.3) 0.3 10.9 25.8 0.3 26.1
Profit before
tax 10.7 (0.3) 0.3 10.7 25.6 0.3 25.9
Tax (2.0) - - (2.0) (0.4) - (0.4)
Profit for the
period(1) 8.7 (0.3) 0.3 8.7 25.2 0.3 25.5
--------------- -------------- ------------ --------------- --------- -------------- -------------- ---------
Total
Orders
received 90.7 - - 90.7 173.9 (7.9) 166.0
Closing order
book 35.0 - (0.5) 34.5 34.0 (4.0) 30.0
Revenue 81.1 - (2.2) 78.9 163.2 (4.0) 159.2
EBITDA 16.6 (0.3) (0.2) 16.1 35.9 (0.3) 35.6
Operating
profit 9.6 (0.3) 0.3 9.6 19.8 0.3 20.1
Profit before
tax 8.9 (0.3) 0.3 8.9 18.6 0.3 18.9
Tax (1.4) - - (1.4) 2.9 - 2.9
Profit for the
period(1) 7.5 (0.3) 0.3 7.5 21.5 0.3 21.8
--------------- -------------- ------------ --------------- --------- -------------- -------------- ---------
(1) Profit for the period from continuing operations.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UAUBRWRAVRAR
(END) Dow Jones Newswires
May 02, 2018 02:00 ET (06:00 GMT)
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